Par passes Negotiable Instruments (Amendment) Bill

Updated: Monday, December 7, 2015, 18:58 [IST]

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New Delhi, Dec 7: A bill providing for filing of cheque bounce cases at the place where a cheque is presented for clearance and not the place of issue, was approved by Parliament with Rajya Sabha passing it today without debate.

The bill passed by Lok Sabha on August 6 in the Monsoon Session seeks to replace an ordinance which was re-promulgated earlier. M

inister of State for Finance Jayant Sinha moved the Negotiable Instruments (Amendment) Bill, 2015 for passage after Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi said that it had been decided to pass the bill today.

Deputy Chairman P J Kurien also expressed agreement saying that it was decided to pass this bill without any discussion. T

he amendments in the Negotiable Instruments Act will have implications for over 18 lakh cheque bounce cases pending in various courts, Minister of State for Finance Jayant Sinha said while piloting the Negotiable Instruments (Amendment) Bill 2015.

The amendment, which enables filing of cheque bounce cases in the place where the cheque was presented for clearance or payment and not the place of issue, seeks to overturn a Supreme Court ruling which said the cases have to be initiated where the cheque-issuing branch was located.

There are an estimated 18 lakh cheque bounce cases across the country, of which about 38,000 are pending in High Courts.

The amendment provides that cases of bouncing of cheques can be filed only in a court in whose jurisdiction the bank branch of the payee (person who receives the cheque) lies.

If a complaint against a person issuing a cheque has been filed in the court with the appropriate jurisdiction, then all subsequent complaints against that person will be filed in the same court, irrespective of the relevant jurisdiction area.

The Statement of Objects and Reasons of the bill says that following the apex court ruling, representations were made by various stakeholders including industry associations and financial institutions, expressing concern about the wide impact the judgement would have on business interests as it will offer undue protection to defaulters at the expense of the aggrieved complainant.

After passage of the bill, Naqvi thanked the Opposition for cooperation in passing the measure saying it is a "good beginning".